82 FR 60426 - Ausdal Financial Partners, Inc. and Ausdal Unit Investment Trust
SECURITIES AND EXCHANGE COMMISSION Federal Register Volume 82, Issue 243 (December 20, 2017)
Federal Register Volume 82, Issue 243 (December 20, 2017)
| Page Range | 60426-60429 | |
| FR Document | 2017-27337 |
[Federal Register Volume 82, Number 243 (Wednesday, December 20, 2017)] [Notices] [Pages 60426-60429] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2017-27337] ----------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION [Investment Company Act Release No. 32939; 812-14785] Ausdal Financial Partners, Inc. and Ausdal Unit Investment Trust December 14, 2017. AGENCY: Securities and Exchange Commission (``Commission''). ACTION: Notice. ----------------------------------------------------------------------- Notice of an application under (a) section 6(c) of the Investment Company Act of 1940 (``Act'') for an exemption from sections 2(a)(32), 2(a)(35), 14(a), 19(b), 22(d) and 26(a)(2)(C) of the Act and rules 19b- 1 and rule 22c-1 thereunder and (b) sections 11(a) and 11(c) of the Act for approval of certain exchange and rollover privileges. Applicants: Ausdal Financial Partners, Inc. (``Ausdal'') and Ausdal Unit Investment Trust.\1\ --------------------------------------------------------------------------- \1\ Applicants also request relief for future registered unit investment trusts (collectively, with Ausdal Unit Investment Trust, the ``Trusts'') and series of the Trusts (``Series'') that are sponsored by Ausdal or any entity controlling, controlled by or under common control with Ausdal (together with Ausdal, the ``Depositor''). Any future Trust and Series that relies on the requested order will comply with the terms and conditions of the application. All existing entities that currently intend to rely on the requested order are named as applicants. --------------------------------------------------------------------------- Summary of Application: Applicants request an order to permit certain unit investment trusts (``UIT'') to: (a) impose sales charges on a deferred basis and waive the deferred sales charge in certain cases; (b) offer unitholders certain exchange and rollover options; (c) publicly offer units without requiring the Depositor to take for its own account $100,000 worth of units; and (d) distribute capital gains resulting from the sale of portfolio securities within a reasonable time after receipt. Filing Dates: The application was filed on June 20, 2017, and amended on October 27, 2017. Hearing or Notification of Hearing: An order granting the requested relief will be issued unless the Commission orders a hearing. Interested persons may [[Page 60427]] request a hearing by writing to the Commission's Secretary and serving applicants with a copy of the request, personally or by mail. Hearing requests should be received by the Commission by 5:30 p.m. on January 8, 2018, and should be accompanied by proof of service on applicants, in the form of an affidavit, or for lawyers, a certificate of service. Pursuant to rule 0-5 under the Act, hearing requests should state the nature of the writer's interest, any facts bearing upon the desirability of a hearing on the matter, the reason for the request, and the issues contested. Persons who wish to be notified of a hearing may request notification by writing to the Commission's Secretary. ADDRESSES: Secretary, Securities and Exchange Commission, 100 F Street, NE, Washington, DC 20549-1090; Applicants, 3250 Lacey Road, Suite 130, Downers Grove, IL 60515, and Morrison C. Warren, Walter L. Draney and Suzanne M. Russell, Chapman and Cutler LLP, 111 West Monroe Street, Chicago, IL 60603. FOR FURTHER INFORMATION CONTACT: Laura L. Solomon, Senior Counsel, at (202) 551-6915, or David J. Marcinkus, Branch Chief, at (202) 551-6821 (Division of Investment Management, Chief Counsel's Office). SUPPLEMENTARY INFORMATION: The following is a summary of the application. The complete application may be obtained via the Commission's website by searching for the file number, or an applicant using the Company name box, at http://www.sec.gov/search/search.htm or by calling (202) 551-8090. Applicants' Representations: 1. Ausdal Unit Investment Trust and any future Trust will be a UIT registered under the Act. Ausdal, an Iowa corporation, is registered under the Securities Exchange Act of 1934 as a broker-dealer and will be the Depositor of Ausdal Unit Investment Trust. Each Series will be created by a trust indenture between the Depositor and a banking institution or trust company as trustee. 2. The Depositor acquires a portfolio of securities, which it deposits with the series trustee (``Trustee'') in exchange for certificates representing units of fractional undivided interest in the Series' portfolio (``Units''). The Units are offered to the public through the Depositor and dealers at a price which, during the initial offering period, is based upon the aggregate market value of the underlying securities, or, the aggregate offering side evaluation of the underlying securities if the underlying securities are not listed on a securities exchange, plus a front-end sales charge, a deferred sales charge or both. The maximum sales charge may be reduced in compliance with rule 22d-1 under the Act in certain circumstances, which are disclosed in the Series' prospectus. 3. The Depositor may, but is not legally obligated to, maintain a secondary market for Units of an outstanding Series. Other broker- dealers may or may not maintain a secondary market for Units of a Series. If a secondary market is maintained, investors will be able to purchase Units on the secondary market at the current public offering price plus a front-end sales charge. If such a market is not maintained at any time for any Series, holders of the Units (``Unitholders'') of that Series may redeem their Units through the Trustee. A. Deferred Sales Charge and Waiver of Deferred Sales Charge Under Certain Circumstances 1. Applicants request an order to the extent necessary to permit one or more Series to impose a sales charge on a deferred basis (``DSC''). For each Series, the Depositor would set a maximum sales charge per Unit, a portion of which may be collected ``up front'' (i.e., at the time an investor purchases the Units). The DSC would be collected subsequently in installments (``Installment Payments'') as described in the application. The Depositor would not add any amount for interest or any similar or related charge to adjust for such deferral. 2. When a Unitholder redeems or sells Units, the Depositor intends to deduct any unpaid DSC from the redemption or sale proceeds. When calculating the amount due, the Depositor will assume that Units on which the DSC has been paid in full are redeemed or sold first. With respect to Units on which the DSC has not been paid in full, the Depositor will assume that the Units held for the longest time are redeemed or sold first. Applicants represent that the DSC collected at the time of redemption or sale, together with the Installment Payments and any amount collected up front, will not exceed the maximum sales charge per Unit. Under certain circumstances, the Depositor may waive the collection of any unpaid DSC in connection with redemptions or sales of Units. These circumstances will be disclosed in the prospectus for the relevant Series and implemented in accordance with rule 22d-1 under the Act. 3. Each Series offering Units subject to a DSC will state the maximum charge per Unit in its prospectus. In addition, the prospectus for such Series will include the table required by Form N-1A (modified as appropriate to reflect the difference between UITs and open-end management investment companies) and a schedule setting forth the number and date of each Installment Payment, along with the duration of the collection period. The prospectus also will disclose that portfolio securities may be sold to pay the DSC if distribution income is insufficient and that securities will be sold pro rata, if practicable, otherwise a specific security will be designated for sale. B. Exchange Option and Rollover Option 1. Applicants request an order to the extent necessary to permit Unitholders of a Series to exchange their Units for Units of another Series (``Exchange Option'') and Unitholders of a Series that is terminating to exchange their Units for Units of a new Series of the same type (``Rollover Option''). The Exchange Option and Rollover Option would apply to all exchanges of Units sold with a front-end sales charge, a DSC or both. 2. A Unitholder who purchases Units under the Exchange Option or Rollover Option would pay a lower sales charge than that which would be paid for the Units by a new investor. The reduced sales charge will be reasonably related to the expenses incurred in connection with the administration of the DSC program, which may include an amount that will fairly and adequately compensate the Depositor and participating underwriters and brokers for their services in providing the DSC program. Applicants' Legal Analysis: A. DSC and Waiver of DSC 1. Section 4(2) of the Act defines a ``unit investment trust'' as an investment company that issues only redeemable securities. Section 2(a)(32) of the Act defines a ``redeemable security'' as a security that, upon its presentation to the issuer, entitles the holder to receive approximately his or her proportionate share of the issuer's current net assets or the cash equivalent of those assets. Rule 22c-1 under the Act requires that the price of a redeemable security issued by a registered investment company for purposes of sale, redemption or repurchase be based on the security's current net asset value (``NAV''). Because the collection of any unpaid DSC may cause a redeeming Unitholder to receive an amount less than the NAV of the redeemed Units, applicants request relief from section 2(a)(32) and rule 22c-1. [[Page 60428]] 2. Section 22(d) of the Act and rule 22d-1 under the Act require a registered investment company and its principal underwriter and dealers to sell securities only at the current public offering price described in the investment company's prospectus, with the exception of sales of redeemable securities at prices that reflect scheduled variations in the sales load. Section 2(a)(35) of the Act defines the term ``sales load'' as the difference between the sales price and the portion of the proceeds invested by the depositor or trustee. Applicants request relief from section 2(a)(35) and section 22(d) to permit waivers, deferrals or other scheduled variations of the sales load. 3. Under section 6(c) of the Act, the Commission may exempt classes of transactions, if and to the extent that such exemption is necessary or appropriate in the public interest and consistent with the protection of investors and the purposes fairly intended by the policy and provisions of the Act. Applicants state that their proposal meets the standards of section 6(c). Applicants state that the provisions of section 22(d) are intended to prevent (a) riskless trading in investment company securities due to backward pricing, (b) disruption of orderly distribution by dealers selling shares at a discount, and (c) discrimination among investors resulting from different prices charged to different investors. Applicants assert that the proposed DSC program will present none of these abuses. Applicants further state that all scheduled variations in the sales load will be disclosed in the prospectus of each Series and applied uniformly to all investors, and that applicants will comply with all the conditions set forth in rule 22d-1. 4. Section 26(a)(2)(C) of the Act, in relevant part, prohibits a trustee or custodian of a UIT from collecting from the trust as an expense any payment to the trust's depositor or principal underwriter. Because the Trustee's payment of the DSC to the Depositor may be deemed to be an expense under section 26(a)(2)(C), applicants request relief under section 6(c) from section 26(a)(2)(C) to the extent necessary to permit the Trustee to collect Installment Payments and disburse them to the Depositor. Applicants submit that the relief is appropriate because the DSC is more properly characterized as a sales load. B. Exchange Option and Rollover Option 1. Sections 11(a) and 11(c) of the Act prohibit any offer of exchange by a UIT for the securities of another investment company unless the terms of the offer have been approved in advance by the Commission. Applicants request an order under sections 11(a) and 11(c) for Commission approval of the Exchange Option and the Rollover Option. C. Net Worth Requirement 1. Section 14(a) of the Act requires that a registered investment company have $100,000 of net worth prior to making a public offering. Applicants state that each Series will comply with this requirement because the Depositor will deposit more than $100,000 of securities. Applicants assert, however, that the Commission has interpreted section 14(a) as requiring that the initial capital investment in an investment company be made without any intention to dispose of the investment. Applicants state that, under this interpretation, a Series would not satisfy section 14(a) because of the Depositor's intention to sell all the Units of the Series. 2. Rule 14a-3 under the Act exempts UITs from section 14(a) if certain conditions are met, one of which is that the UIT invest only in ``eligible trust securities,'' as defined in the rule. Applicants state that they may not rely on rule 14a-3 because certain Series (collectively, ``Structured Series'') will invest all or a portion of their assets in equity securities, certain debt securities, shares of registered investment companies, Flexible Exchange[supreg] Options (``FLEX Options''),\2\ or other assets which do not satisfy the definition of eligible trust securities. --------------------------------------------------------------------------- \2\ Applicants state that a Structured Series will invest in FLEX Options with expiration dates that coincide with the Structured Series' maturity date and any relief granted from the provisions of sections 14(a) and 19(b) of the Act and rule 19b-1 under the Act included in the requested order will not extend to any Series that intends to hold a derivative security other than FLEX Options. --------------------------------------------------------------------------- 3. Applicants request an exemption under section 6(c) of the Act to the extent necessary to exempt the Structured Series from the net worth requirement in section 14(a). Applicants state that the Series and the Depositor will comply in all respects with the requirements of rule 14a-3, except that the Structured Series will not restrict their portfolio investments to ``eligible trust securities.'' D. Capital Gains Distribution 1. Section 19(b) of the Act and rule 19b-1 under the Act provide that, except under limited circumstances, no registered investment company may distribute long-term gains more than once every twelve months. Rule 19b-1(c), under certain circumstances, exempts a UIT investing in eligible trust securities (as defined in rule 14a-3) from the requirements of rule 19b-1. Because the Structured Series do not limit their investments to eligible trust securities, however, the Structured Series will not qualify for the exemption in paragraph (c) of rule 19b-1. Applicants therefore request an exemption under section 6(c) from section 19(b) and rule 19b-1 to the extent necessary to permit capital gains earned in connection with the sale of portfolio securities to be distributed to Unitholders along with the Structured Series' regular distributions. In all other respects, applicants will comply with section 19(b) and rule 19b-1. 2. Applicants state that their proposal meets the standards of section 6(c). Applicants assert that any sale of portfolio securities would be triggered by the need to meet Trust expenses, Installment Payments, or by redemption requests, events over which the Depositor and the Structured Series do not have control. Applicants further state that, because principal distributions must be clearly indicated in accompanying reports to Unitholders as a return of principal and will be relatively small in comparison to normal dividend distributions, there is little danger of confusion from failure to differentiate among distributions. Applicants' Conditions: Applicants agree that any order granting the requested relief will be subject to the following conditions: A. DSC Relief and Exchange and Rollover Options 1. Whenever the Exchange Option or Rollover Option is to be terminated or its terms are to be amended materially, any holder of a security subject to that privilege will be given prominent notice of the impending termination or amendment at least 60 days prior to the date of termination or the effective date of the amendment, provided that: (a) No such notice need be given if the only material effect of an amendment is to reduce or eliminate the sales charge payable at the time of an exchange, to add one or more new Series eligible for the Exchange Option or the Rollover Option, or to delete a Series which has terminated; and (b) no notice need be given if, under extraordinary circumstances, either (i) there is a suspension of the redemption of Units of the Series under section 22(e) of the Act and the rules and regulations promulgated thereunder, or (ii) a Series temporarily delays or ceases the sale of its Units because it is unable to invest amounts effectively in accordance with [[Page 60429]] applicable investment objectives, policies and restrictions. 2. An investor who purchases Units under the Exchange Option or Rollover Option will pay a lower sales charge than that which would be paid for the Units by a new investor. 3. The prospectus of each Series offering exchanges or rollovers and any sales literature or advertising that mentions the existence of the Exchange Option or Rollover Option will disclose that the Exchange Option and the Rollover Option are subject to modification, termination or suspension without notice, except in certain limited cases. 4. Any DSC imposed on a Series' Units will comply with the requirements of subparagraphs (1), (2) and (3) of rule 6c-10(a) under the Act. 5. Each Series offering Units subject to a DSC will include in its prospectus the disclosure required by Form N-1A relating to deferred sales charges (modified as appropriate to reflect the differences between UITs and open-end management investment companies) and a schedule setting forth the number and date of each Installment Payment. B. Net Worth Requirement Applicants will comply in all respects with the requirements of rule 14a-3 under the Act, except that the Structured Series will not restrict their portfolio investments to ``eligible trust securities.'' For the Commission, by the Division of Investment Management, under delegated authority. Eduardo A. Aleman, Assistant Secretary. [FR Doc. 2017-27337 Filed 12-19-17; 8:45 am] BILLING CODE 8011-01-P
![60426 Federal Register / Vol. 82, No. 243 / Wednesday, December 20, 2017 / Notices
proposed rule change is consistent with the public interest; (2) for the protection Number SR–CboeEDGX–2017–005 and
the rules of other exchanges.9 of investors; or (3) otherwise in should be submitted on or before
furtherance of the purposes of the Act. January 10, 2018.
(B) Self-Regulatory Organization’s
If the Commission takes such action, the For the Commission, by the Division of
Statement on Burden on Competition
Commission shall institute proceedings Trading and Markets, pursuant to delegated
The Exchange does not believe that to determine whether the proposed rule authority.13
the proposed rule change will impose should be approved or disapproved. Eduardo A. Aleman,
any burden on competition that is not
IV. Solicitation of Comments Assistant Secretary.
necessary or appropriate in furtherance
of the purposes of the Act. Rather, the Interested persons are invited to [FR Doc. 2017–27350 Filed 12–19–17; 8:45 am]
Exchange believes that the proposed submit written data, views, and BILLING CODE 8011–01–P
rule change will result in additional arguments concerning the foregoing,
investment options and opportunities to including whether the proposed rule
achieve the investment and trading change is consistent with the Act. SECURITIES AND EXCHANGE
objectives of market participants seeking Comments may be submitted by any of COMMISSION
efficient trading and hedging vehicles, the following methods: [Investment Company Act Release No.
to the benefit of investors, market 32939; 812–14785]
Electronic Comments
participants, and the marketplace in
general. Additionally, this proposed • Use the Commission’s internet Ausdal Financial Partners, Inc. and
rule change seeks to match the strike comment form (http://www.sec.gov/ Ausdal Unit Investment Trust
setting regime for IVV, SPY, and DIA rules/sro.shtml); or
options available on other options • Send an email to rule-comments@ December 14, 2017.
sec.gov. Please include File Number SR– AGENCY: Securities and Exchange
exchanges; thus, the proposed rule
CboeEDGX–2017–005 on the subject Commission (‘‘Commission’’).
change may alleviate any potential
line. ACTION: Notice.
burden on competition.10
(C) Self-Regulatory Organization’s Paper Comments Notice of an application under (a)
Statement on Comments on the • Send paper comments in triplicate section 6(c) of the Investment Company
Proposed Rule Change Received From to Secretary, Securities and Exchange Act of 1940 (‘‘Act’’) for an exemption
Members, Participants or Others Commission, 100 F Street NE, from sections 2(a)(32), 2(a)(35), 14(a),
Washington, DC 20549–1090. 19(b), 22(d) and 26(a)(2)(C) of the Act
Written comments were neither
All submissions should refer to File and rules 19b–1 and rule 22c–1
solicited nor received.
Number SR–CboeEDGX–2017–005. This thereunder and (b) sections 11(a) and
III. Date of Effectiveness of the file number should be included on the 11(c) of the Act for approval of certain
Proposed Rule Change and Timing for subject line if email is used. To help the exchange and rollover privileges.
Commission Action Commission process and review your Applicants: Ausdal Financial
Because the foregoing proposed rule comments more efficiently, please use Partners, Inc. (‘‘Ausdal’’) and Ausdal
change does not: (A) Significantly affect only one method. The Commission will Unit Investment Trust.1
the protection of investors or the public Summary of Application: Applicants
post all comments on the Commission’s
interest; (B) impose any significant request an order to permit certain unit
internet website (http://www.sec.gov/
burden on competition; and (C) by its investment trusts (‘‘UIT’’) to: (a) impose
rules/sro.shtml). Copies of the
terms, become operative for 30 days sales charges on a deferred basis and
submission, all subsequent
from the date on which it was filed or waive the deferred sales charge in
amendments, all written statements
such shorter time as the Commission certain cases; (b) offer unitholders
with respect to the proposed rule
may designate it has become effective certain exchange and rollover options;
change that are filed with the
pursuant to Section 19(b)(3)(A) of the (c) publicly offer units without requiring
Commission, and all written
Act 11 and paragraph (f)(6) of Rule 19b– the Depositor to take for its own account
communications relating to the
4 thereunder,12 the Exchange has $100,000 worth of units; and (d)
proposed rule change between the
designated this rule filing as non- distribute capital gains resulting from
Commission and any person, other than
controversial. The Exchange has given the sale of portfolio securities within a
those that may be withheld from the
the Commission written notice of its reasonable time after receipt.
public in accordance with the Filing Dates: The application was
intent to file the proposed rule change, provisions of 5 U.S.C. 552, will be
along with a brief description and text filed on June 20, 2017, and amended on
available for website viewing and October 27, 2017.
of the proposed rule change at least five printing in the Commission’s Public
business days prior to the date of filing Hearing or Notification of Hearing: An
Reference Room, 100 F Street NE, order granting the requested relief will
of the proposed rule change, or such Washington, DC 20549, on official
shorter time as designated by the be issued unless the Commission orders
business days between the hours of a hearing. Interested persons may
Commission. 10:00 a.m. and 3:00 p.m. Copies of the
At any time within 60 days of the filing also will be available for 13 17 CFR 200.30–3(a)(12).
filing of the proposed rule change, the inspection and copying at the principal 1 Applicants also request relief for future
Commission summarily may office of the Exchange. All comments registered unit investment trusts (collectively, with
temporarily suspend such rule change if received will be posted without change. Ausdal Unit Investment Trust, the ‘‘Trusts’’) and
sradovich on DSK3GMQ082PROD with NOTICES
it appears to the Commission that such Persons submitting comments are series of the Trusts (‘‘Series’’) that are sponsored by
action is: (1) Necessary or appropriate in Ausdal or any entity controlling, controlled by or
cautioned that we do not redact or edit under common control with Ausdal (together with
9 See Box Rule IM–5050–1 and Cboe Rule
personal identifying information from Ausdal, the ‘‘Depositor’’). Any future Trust and
comment submissions. You should Series that relies on the requested order will
5.5.08(b). comply with the terms and conditions of the
10 Id. submit only information that you wish application. All existing entities that currently
11 15 U.S.C. 78s(b)(3)(A). to make available publicly. All intend to rely on the requested order are named as
12 17 CFR 240.19b–4. submissions should refer to File applicants.
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![Federal Register / Vol. 82, No. 243 / Wednesday, December 20, 2017 / Notices 60429
applicable investment objectives, (‘‘Act’’),1 and Rule 19b–4 thereunder,2 Cross provided for in Rule 4753. Prior
policies and restrictions. notice is hereby given that on December to the IPO Halt Cross, trading in the
2. An investor who purchases Units 8, 2017, The Nasdaq Stock Market LLC security is halted, pursuant to Rule
under the Exchange Option or Rollover (‘‘Nasdaq’’ or ‘‘Exchange’’) filed with the 4120(a)(7), until such time as the
Option will pay a lower sales charge Securities and Exchange Commission conditions in Rule 4120(c)(8) are
than that which would be paid for the (‘‘Commission’’) the proposed rule satisfied and Nasdaq releases the
Units by a new investor. change as described in Items I and II, security for trading. Market participants
below, which Items have been prepared may enter orders in the security for
3. The prospectus of each Series
by the Exchange. The Commission is participation in the IPO Halt Cross
offering exchanges or rollovers and any
publishing this notice to solicit beginning at 4:00 a.m. As the scheduled
sales literature or advertising that
comments on the proposed rule change time for the IPO Halt Cross approaches,
mentions the existence of the Exchange
from interested persons. the security enters a Display-Only
Option or Rollover Option will disclose
Period during which indicative
that the Exchange Option and the I. Self-Regulatory Organization’s
information about the potential outcome
Rollover Option are subject to Statement of the Terms of Substance of of the IPO Halt Cross is displayed to
modification, termination or suspension the Proposed Rule Change market participants and during which
without notice, except in certain limited The Exchange proposes to amend market participants may continue to
cases. Rule 4120 (Limit Up-Limit Down Plan enter orders.
4. Any DSC imposed on a Series’ and Trading Halts) 3 to reduce the length After the conclusion of the Display-
Units will comply with the of the ‘‘Display-Only Period’’ for the Only Period, the security enters a ‘‘Pre-
requirements of subparagraphs (1), (2) initial pricing on Nasdaq of a security Launch Period’’ of indeterminate
and (3) of rule 6c–10(a) under the Act. that is the subject of an initial public duration, during which indicative
5. Each Series offering Units subject to offering (‘‘IPO’’). information continues to be
a DSC will include in its prospectus the The text of the proposed rule change disseminated.4 The Pre-Launch Period
disclosure required by Form N–1A is available on the Exchange’s website at ends and the security is released for
relating to deferred sales charges http://nasdaq.cchwallstreet.com, at the trading by Nasdaq when the conditions
(modified as appropriate to reflect the principal office of the Exchange, and at described in paragraphs (c)(8)(A)(i), (ii),
differences between UITs and open-end the Commission’s Public Reference and (iii) of Rule 4120 are all met:
management investment companies) Room. • Nasdaq receives notice from the
and a schedule setting forth the number underwriter of the IPO that the security
II. Self-Regulatory Organization’s is ready to trade. The Nasdaq system
and date of each Installment Payment. Statement of the Purpose of, and then calculates the Current Reference
B. Net Worth Requirement Statutory Basis for, the Proposed Rule Price at that time (the ‘‘Expected Price’’)
Change and displays it to the underwriter. If the
Applicants will comply in all respects
with the requirements of rule 14a–3 In its filing with the Commission, the underwriter then approves proceeding,
under the Act, except that the Exchange included statements the Nasdaq system will conduct two
Structured Series will not restrict their concerning the purpose of and basis for pricing validation checks.
portfolio investments to ‘‘eligible trust the proposed rule change and discussed • First, the Nasdaq system must
securities.’’ any comments it received on the determine that all market orders will be
proposed rule change. The text of these executed in the IPO Halt Cross; and
For the Commission, by the Division of statements may be examined at the • Second, if the actual price
Investment Management, under delegated places specified in Item IV below. The calculated by the IPO Halt Cross differs
authority. from the Expected Price by an amount
Exchange has prepared summaries, set
Eduardo A. Aleman, forth in sections A, B, and C below, of in excess of a price band previously
Assistant Secretary. the most significant aspects of such selected by the underwriter, the security
[FR Doc. 2017–27337 Filed 12–19–17; 8:45 am] statements. will not be released for trading and the
BILLING CODE 8011–01–P Pre-Launch Period will continue.
A. Self-Regulatory Organization’s
The failure to satisfy these conditions
Statement of the Purpose of, and during the process to release the
SECURITIES AND EXCHANGE Statutory Basis for, the Proposed Rule security for trading will result in a delay
COMMISSION Change of the release for trading of the IPO
1. Purpose security, and a continuation of the Pre-
[Release No. 34–82327; File No. SR– The purpose of this proposal is to Launch Period, until all conditions have
NASDAQ–2017–129]
amend Rule 4120 (Limit Up-Limit Down been satisfied. Market participants may
Plan and Trading Halts) to reduce the continue to enter orders and order
Self-Regulatory Organizations; The cancellations for participation in the
Nasdaq Stock Market LLC; Notice of length of the Display-Only Period for
the initial pricing on Nasdaq of a IPO Halt Cross during the Pre-Launch
Filing and Immediate Effectiveness of Period up to the point that the IPO Halt
Proposed Rule Change To Amend Rule security that is the subject of an IPO
from 15 minutes to 10 minutes. In all Cross auction process commences.
4120 (Limit Up-Limit Down Plan and Based on feedback from underwriters
Trading Halts) To Reduce the Length other respects, the process for
participating in the IPO process, Nasdaq
of the ‘‘Display-Only Period’’ for the conducting the initial pricing of an IPO
sradovich on DSK3GMQ082PROD with NOTICES
is proposing to reduce the time of the
Initial Pricing on Nasdaq of a Security security will remain unchanged.
Initial pricing of an IPO security on Display-Only Period from 15 minutes to
That Is the Subject of an Initial Public 10 minutes. As discussed above, market
Nasdaq occurs by means of the IPO Halt
Offering participants may begin entering orders
1 15 U.S.C. 78s(b)(1). in an IPO security at 4:00 a.m., while
December 14, 2017.
2 17 CFR 240.19b–4. the initial pricing of IPOs occurs no
Pursuant to Section 19(b)(1) of the 3 References to rules are to Nasdaq rules, unless
Securities Exchange Act of 1934 otherwise noted. 4 Nasdaq Rule 4753(b)(1).
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Document Created: 2018-10-25 10:56:00
Document Modified: 2018-10-25 10:56:00
| Category | Regulatory Information | |
| Collection | Federal Register | |
| sudoc Class | AE 2.7: GS 4.107: AE 2.106: | |
| Publisher | Office of the Federal Register, National Archives and Records Administration | |
| Section | Notices | |
| Action | Notice. | |
| Dates | The application was filed on June 20, 2017, and amended on October 27, 2017. | |
| Contact | Laura L. Solomon, Senior Counsel, at (202) 551-6915, or David J. Marcinkus, Branch Chief, at (202) 551-6821 (Division of Investment Management, Chief Counsel's Office). | |
| FR Citation | 82 FR 60426 |
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